Budget Deal Impact On Medicare
Several items that the media seems to be overlooking in the recent budget deal are potentially noteworthy changes in how Medicare is administered. One item is the removal of Medicare’s independent payment advisory board, authorized under the Affordable Care Act, to function as a check on higher Medicare expenses. Some had previously labeled this as “death panels”.
There were adjustments to prescription drug coverage under Medicare’s Part D plans. The effect is that consumers will pay no more than 25% of their drug cost – less in most cases starting in 2019. Before the deal, the 25% threshold was not to go into effect until 2020. In addition, those who need long-term outpatient therapy had to deal with expense caps. The budget agreement removes these caps.
How will these benefits be paid for? The new budget requires individuals earning more than $500,000 a year, or joint filers earning more than $750,000, to pay 85% of the actual expenses of their Part B and D plans in 2019, up from 80% in 2018. As a point of reference, many Medicare enrollees pay premiums that equal approximately 25% of these expenses.